Bearskin Farms, east of Little Rock, is installing one of the largest solar projects on a farm in Arkansas to gain some control over the farm’s energy costs at a time when solar power may be more accessible than ever in agriculture.
Renewable energy — a priority in the recently passed Inflation Reduction Act — is growing in Arkansas’ agriculture sector as more farmers turn to energy sources like solar to power everything from poultry house fans to grain dryers and well pumps.
The act, signed into law by President Joe Biden on Aug. 16, is being described as an effort to combat climate change in a clear way, amid numerous reports of severe and often unpredictable weather facing U.S. farmers.
Bearskin Farm owner Lambert Marshall is installing a 4,500-panel, 2-megawatt solar array on his farm in Lonoke and Pulaski counties that will produce about 3.6 million kilowatt hours a year.
The farm grows cotton, corn, rice, soybeans and wheat and will use solar energy for irrigation, grain drying and crop storage.
“Bearskin will not be completely dependent on solar energy; electric irrigation equipment is not reliable in the more rural areas of the farm,” Marshall said.
“We hope to continue to electrify more of our irrigation equipment to reduce our environmental impact.”
Farming is a capital-intensive business, Marshall said. “Our farm uses a lot of energy to dry and dry our produce.
“We believe solar will help stabilize and lower our energy costs over time. Bearskin’s solar array will have the capacity and scale to help generate significant savings for the farm.”
According to the U.S. Energy Information Administration, renewable energy accounted for only 10% of electricity generated in Arkansas last year, but solar generation is growing in Arkansas and accounted for one-tenth of the state’s renewable electricity generation last year, up from the previous year. compared to 18 times more. 2016.
The USDA announced Wednesday that it is investing $121 million to combat climate change in socially vulnerable communities in 49 U.S. states with funding from the Inflation Reduction Act.
Arkansas buyers received a total of $127,721 in Rural Energy for America Program (REAP) Renewable Energy and Energy Efficiency grants to help install solar panels or LED lighting.
North Little Rock-based Seal Solar is installing the array at Bearskin Farm and also installs solar power systems for agricultural, residential and other projects around the state.
“The main thing we’re seeing is farmers, business owners and everybody just want to have control,” said Seal Solar co-founder and president Heather Nelson. “Solar power now gives farmers the ability to control their electricity costs. This allows them to budget better.
“It allows them to deliver [return on investment] on something that was just a sunk cost in the past.”
STATE LAW SUPPORTED
Arkansas farmers who produce solar energy can use net metering to offset their electricity bills.
Act 464 of 2019 allows utility customers who generate their own solar energy and generate excess to send additional energy for credit on their bill. The law also raised the limit from 300 kilowatts to 1,000 kilowatts for commercial customers of electric utilities with solar projects.
On June 1, 2020, the Public Service Commission, which regulates utilities, published new net metering rules for solar development. The rules allow existing contracts between utilities and non-meter customers to remain in place or end until 2040. .
Farmers may have multiple meters connected to wells, grain bins, homes, shops or barns, and net-meter aggregation allows them to build a solar project and connect all their meters together, Nelson said.
Lauren Waldrip, executive director of the Arkansas Advanced Energy Association, said farmers with a net metering system would receive one credit for the energy they produce and send it to the grid, which is applied to their monthly electricity bill.
“We design [solar power] We base the project on 12 months of usage, and then once it’s built, we provide the utility with a list of those meters in the order in which the customer wants the solar energy to offset those bills,” Nelson said.
“They will rank them, and once a year the utility is allowed to come back and change that rank.”
Tom Jacobs, a retired row farmer from DeWitt, became the first to use solar energy on a farm in Arkansas.
“How I looked when I put it [solar panels] — like I was buying my own generator and buying a piece of farm equipment,” Jacobs said. “I was going to see what the profit was on that equipment. It’s been about eight years, and the net amount I’ve paid for it, that’s how much I’ll save on energy costs,” he said.
Jacobs supplements the electricity with solar energy from 84 panels producing about 25,000 watts to power the grain dryers, farm store and tenant house.
“When we put it in, Entergy wanted a rate increase … and that was a way to lock in the rate because we were going to be grandfathered in,” Jacobs said.
“Since every kilowatt I produce will be exchanged, whether I use it on the farm or go to the neighbor, then I get credit for it when I need it during the drying season or one. my other places,” Jacobs said, adding that it should cover 70% to 80% of the farm’s utilization.
Act 464 also authorized third-party financing of solar projects designed to help tax-exempt organizations and government agencies that do not qualify for federal tax incentives to install solar panels.
It allowed those businesses to use solar energy by allowing them to sign leases with third parties that install solar projects. The state Legislature also passed Act 507 in 2019, which allows government agencies to issue bonds for energy conservation projects. School districts can also participate.
The act allowed energy performance contracts to be extended for a final 20 years, provided the project was guaranteed to last that long and the project had a useful life of more than 20 years.
BIRD BIRDS ARE RIDING ON THE SUN
Marvin Childers, president of the Poultry Federation, said that when certain factors come together, solar energy is very beneficial to the energy-intensive poultry industry.
Poultry farmers can use the sun to generate electricity to power poultry houses that use fans to meet the cooling requirements of broiler chickens.
About 20.5 million chickens are processed weekly in Arkansas, and poultry accounts for 50% of Arkansas’ agricultural cash receipts, Childers said. To determine if solar energy makes sense, Childers said, farmers must first determine which energy provider their operation is in, whether it’s Entergy, an electric cooperative or a municipality.
“We know there are some banks that provide 100% financing, and I think when it all comes together, in my opinion, it’s almost a no-brainer for poultry farmers,” Childers said. Waldrip recommended that farmers get multiple bids from different developers. Farmers can also have different returns in terms of cost savings, he said.
Solar will provide a return on investment for Arkansas farmers, Nelson said.
“When we started doing this years ago, the longest warranty [for solar energy] You saw it at the age of 25 [years] and now it’s 30, so the technology is getting better and the warranties are getting longer,” Nelson said.
Childers said it may take some time to see a return on investment for the cost of installing solar panels, but as farmers produce enough energy for the farm’s needs, their energy costs will be lower.
Farmers can use land that may be less productive in terms of crop production for solar panels to cover their utility costs, Nelson said.
Some Arkansas landowners are also getting more involved in solar energy by entering into power purchase agreements.
“Some farmers will sell that power, not necessarily to a utility, but maybe to Amazon; we know Amazon has several projects in eastern Arkansas,” Waldrip said.
“That’s why the combination is so important, because it doesn’t have to be in the same place.”
NEW CLIMATE LAW
Although supply chain and shipping issues related to the pandemic and trade instability have caused some price increases, solar installation costs in the U.S. have fallen more than 60% over the past decade, according to the Solar Energy Industries Association.
The Inflation Reduction Act package increases the existing energy investment tax credit for solar projects to 30%, covering projects installed this year through the end of 2032.
The tax credit also applies to battery storage technology.
Independent energy storage systems such as lithium batteries are eligible for a 30% tax credit, Nelson said.
“That means if you’re just installing a battery system or adding batteries to solar [power] system will be eligible for the 30% tax credit in the future,” Nelson said.
“Storage capacity should be at least 5 kilowatt-hours for commercial and 3 kilowatt-hours for residential.”
There is also an additional 10% tax credit for selling electricity produced by community solar projects to low-income individuals.
There is an additional 10% tax credit for using locally produced equipment for the project.
Solar projects built in former “energy communities” may also receive an additional 10% tax credit.
“There are ways to get a 40% to 50% solar tax credit for commercial projects,” Nelson said. “Like using American-made components and locating the project in a low-income community or brownfield site. The projects are over.” [1 megawatt] must meet additional labor regulations,” he said, stressing that the company advises clients to consult tax professionals to review tax-related solar concerns.
Nelson should also be an option for direct-pay tax-exempt, non-commercial and municipal customers for solar projects coming on stream in 2023.
“Direct payment means that the federal government will pay at least 30% of the total cost of the system to a tax-exempt organization,” Nelson said.
Funding for the Rural Energy for America Program could also see a boost because of the Inflation Reduction Act, Nelson said.
Waldrip said the legislation would encourage domestic manufacturing, which could create millions of U.S. jobs.
“Many of these projects are required to use local resources, especially steel,” he said.
“We know that here in the very near future, Mississippi County, northeast of Arkansas, will be the largest steel-producing state in the country. They will certainly benefit from that.”
The Bearskin Farm solar array near Kerr, seen here in an Aug. 19, 2022 aerial photo, will come online in early October to power the company’s agricultural operations. (Arkansas Democrat-Gazette/Jolin Murphy)